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Estate Planning

Thursday, June 30, 2016

Estate Planning – Know Where Your Assets Are Going


There are multiple steps to creating a successful estate plan.  A large part of estate planning includes creating a will and designating a power of attorney.  A will allows a testator to bequeath property to his or her heirs, such as family members.   All of your property may be accounted for, in advance, if you delineate specific individuals or groups to receive the designated property in your will.  It is a great way to ensure that your house, real property, possessions, cash, and the like, fall into the right hands.


Read more . . .


Monday, June 20, 2016

Estate Planning Matters - Should You Transfer Your Home to Your Children?

Should I Transfer My Home to My Children?

Most people are aware that probate should be avoided if at all possible. It is an expensive, time-consuming process that exposes your family’s private matters to public scrutiny via the judicial system. It sounds simple enough to just gift your property to your children while you are still alive, so it is not subject to probate upon your death, or to preserve the asset in the event of significant end-of-life medical expenses.

This strategy may offer some potential benefits, but those benefits are far outweighed by the risks. And with other probate-avoidance tools available, such as living trusts, it makes sense to view the risks and benefits of transferring title to your property through a very critical lens.

Potential Advantages:

  • Property titled in the names of your heirs, or with your heirs as joint tenants, is not subject to probate upon your death.
  • If you do not need nursing home care for the first 60 months after the transfer, but later do need such care, the property in question will not be considered for Medicaid eligibility purposes.
  • If you are not named on the property’s title at the time of your death, creditors cannot make a claim against the property to satisfy the debt.
  • Your heirs may agree to pay a portion, or all, of the property’s expenses, including taxes, insurance and maintenance.

Potential Disadvantages:

  • It may jeopardize your ability to obtain nursing home care. If you need such care within 60 months of transferring the property, you can be penalized for the gift and may not be eligible for Medicaid for a period of months or years, or will have to find another source to cover the expenses.
  • You lose sole control over your property. Once you are no longer the legal owner, you must get approval from your children in order to sell or refinance the property.
  • If your child files for bankruptcy, or gets divorced, your child’s creditors or former spouse can obtain a legal ownership interest in the property.
  • If you outlive your child, the property may be transferred to your child’s heirs.
  • Potential negative tax consequences: If property is transferred to your child and is later sold, capital gains tax may be due, as your child will not be able to take advantage of the IRS’s primary residence exclusion. You may also lose property tax exemptions. Finally, when the child ultimately sells the property, he or she may pay a higher capital gains tax than if the property was inherited, since inherited property enjoys a stepped-up tax basis as of the date of death.

There is no one-size-fits-all approach to estate planning. Transferring ownership of your property to your children while you are still alive may be appropriate for your situation. However, for most this strategy is not recommended due to the significant risks. If your goal is to avoid probate, maximize tax benefits and provide for the seamless transfer of your property upon your death, a living trust is likely a far better option.


Thursday, June 16, 2016

Access to Digital Assets as Part of Estate Planning


How can I make sure those who need access to my digital assets after I die will have it?

In the current world, most of our records are stored electronically. We all have numerous passwords, easy to mix up or forget. It is necessary, therefore, that, as we tackle the job of estate planning, we ensure that our digital assets, as well as our paper documents, can be accessed by those we designate.

What are digital assets?

"Digital assets" is the terms for information, records and data stored on the computer in electronic form. For any individual acting as a fiduciary, meaning a personal representative of an estate, a trustee, a guardian, of the holder of a power of attorney, it is essential to have access to digital assets.


Read more . . .


Monday, June 6, 2016

Estate Planning Matters - Estate Planning for the Chronically Ill

There are certain considerations that should be kept in mind for those with chronic illnesses.   Before addressing this issue, there should be some clarification as to the definition of "chronically ill." There are at least two definitions of chronically ill. The first is likely the most common meaning, which is an illness that a person may live with for many years. Diseases such as diabetes, cardiovascular disease, lupus, multiple sclerosis, hepatitis C and asthma are some of the more familiar chronic illnesses. Contrast that with a legal definition of chronic illness which usually means that the person is unable to perform at least two activities of daily living such as eating, toileting, transferring, bathing and dressing, or requires considerable supervision to protect from crisis relating to health and safety due to severe impairment concerning mind, or having a level of disability similar to that determined by the Social Security Administration for disability benefits. Having said all of that, the estate planning such a person may undertake will likely be similar to that of a healthy person, but there will likely be a higher sense of urgency and it will be much more "real" and less "hypothetical."

Most healthy individuals view the estate planning they establish as not having any applicability for years, perhaps even decades. Whereas a chronically ill person more acutely appreciates that the planning he or she does will have real consequences in his or her life and the life of loved ones. Some of the most important planning will center around who the person appoints as his or her health care decision maker and also who is appointed to handle financial affairs. A will and/or revocable living trust will play a central role in the person's planning as well.  Care should also be taken to address possible Medicaid planning benefits.  A consultation with an estate planning and elder law attorney is critical to ensuring all necessary planning steps are contemplated and eventually implemented. 


Sunday, May 8, 2016

Learning from Prince's Mistakes


Why should we all have estate plans, no matter what our ages?

When Prince died prematurely last week, the world was in shock. How did an apparently healthy and wildly talented 57-year-old man leave us so suddenly? Not long afterwards, the second shock wave hit when people realized that Prince, who was currently unmarried and had no children, had not left a will.

The question echoed around the world: Who will inherit his estate?

His sister has filed documents to open probate and begin the lengthy process of distributing his assets, estimated at more than $300 million. It seems that someone as wealthy and renowned as Prince would have been advised to consult with an estate planning attorney. The error of omission, however, is not at all uncommon.


Read more . . .


Wednesday, May 4, 2016

A Primer on Spendthrift Trusts


How can I provide for a troubled heir in my estate plan?

When it comes to estate planning, some individuals are faced with the prospect of leaving property to a beneficiary who is not financially responsible or has other issues that may cause him or her to spend through the inheritance. One way to avoid leaving property to an heir who may squander it is to establish a spendthrift trust.

What is a Spendthrift Trust?

In short, a spendthrift trust is designed to limit access to principal in order to protect it from the beneficiary or his or her creditors. Rather than providing trust property directly to the beneficiary, the grantor names a trustee who is tasked with providing a regular payment to, or buying goods and services for, the beneficiary.

Spendthrift trusts are particularly effective when the beneficiary does not know how to handle money, has an addiction to drugs or alcohol, is susceptible to being taken advantage, or has a history of falling behind on debt.


Read more . . .


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477 Viking Drive, Suite 410 , Virginia Beach, VA 23452 | Phone: 757.301.9500
5425 Discovery Park Blvd., Suite 101, Williamsburg, VA 23188 | Phone: 757.301.9500
750 Tysons Blvd., Suite 1500, McLean, VA 22102 (By Appointment Only) | Phone: 757.301.9500